I’ve personally known Alex Zhardanovsky for a long time – for almost as long as I’ve been in the industry. During that time, I’ve learned several things about him. First, he’s one of the smartest business men that I’ve ever met: he knows how to get things done, he knows how to take the competition out when necessary but also knows how to build bridges. Secondly, he always has really hot women around him. I’m not sure what it is, but wherever he goes there are models hanging on him like flies on flypaper. After his success in building EPIC into one of the biggest online advertising media powerhouses, he moved onto creating Petflow.com an online pet-food shipping superstore. In about a year, it’s become the #1 online petfood solution and if he wasn’t already rich enough, making him a much richer man. Maybe we can learn a bit from him.
How did you originally get started with the idea of Azoogleads?
AzoogleAds was created because we really weren’t happy with the way that publishers were treated back in 2000/2001. There really weren’t many “network” options other than Webclients, Adteractive, CJ/Linkshare, private brokered deals and agencies. There was no real-time repo
rting, no reliable way to know how much you were actually getting paid at the end of the month or if a check was even coming. We were already aggregating several publishers’ traffic and disbursing commissions, and those publishers were asking us for an online interface that they could log into to see stats of how their campaigns were performing. So in early 2002, we built the interface, and launched AzoogleAds in July.
Why did Azoogle use its own system instead of using another CPA system like directtrack?
To be perfectly honest, I don’t think directtrack as a licensed platform even existed back in 2002. I believe that Jason Wolfe (the founder of DirectTrack) was still operating MyCoupons.com at the time, but I could be mistaken. More importantly, we have always believed in building infrastructure that suited us, as out-of-the-box solutions have many shortcomings. At the time we launched, we were unique, so we really didn’t have to look “different” than any other network. In hindsight, the fact that we owned our own technology platform allowed us to execute much faster than many of our competitors, because we could build custom solutions for many of our publishers, when others did not.
Do you think that any company can become a major player in the CPA game using a third party system, why or why not?
I am a strong believer in controlling your own destiny and I don’t think you can do that if you build businesses on top of someone else’s technology. Especially when the technology you are using is consumer-facing.
What do you think about state of the industry fraud wise, with companies being investigated by the FTC, AG lawsuits and so on. What did Epic/Azoogle do that was different to prevent this?
Fraud will always exist, no matter how hard you try to curtail it. There will always be opportunistic individuals, those who the laws of this (US) country don’t necessarily touch. At Epic, we spent a considerable amount of resources on ensuring publisher and advertiser compliance, often at the expense of significant revenues.
Is there any company in the CPA game that you can currently point to besides Epic and say that they are doing a good job? What are they doing right?
I really don’t think that anyone stands out, there are hundreds of networks all doing the same thing. Everyone claims to have high payouts, exclusive offers, fast payment terms, and great affiliate managers. None of those 4 things are important anymore, as they’re listed on every single networks’ homepage. I don’t claim to know what the silver bullet is these days, but anyone running a CPA network needs to remember that it’s a technology-enabled services business, and if you don’t have great relationships with all of your partners, on both sides (advertiser and publisher), then you’re just another me-too that no one cares about.
Do you feel there is still space for new CPA Networks to make money? If so, what do they need to provide to compete?
No matter the industry, there is always room for smart people to make money. The ones that will be most successful in this space, are ones that understand their advertisers and are willing to invest resources in creative design, technology infrastructure and their relationships.
What made you and your partner Joe decide to start PetFlow.com?
If you’re a dog or cat owner, there’s 3 things that your dog/cat is guaranteed to do every day. Eat, poop, and sleep. 2 of those 3 things have to do with the pet’s food. Over 40% of American households have a pet, and under 4% of those households have ever made a purchase online for their pets. For us, that presented a huge opportunity for a pet food replenishment businesses. PetFlow is on fire.
Will PetFlow be bigger than Epic money wise for you? Why?
Yes. The online advertising industry generates $22.7 billion in sales in 2009. The Pet industry generates over $48 billion in annual sales. You do the math 🙂
What is PetFlow’s current affiliate model and relationship? Why did you stop using Commission Junction?
We work directly with publishers an do our own media buying. I still believe strongly in affiliate marketing, but CJ was not a good partner for us. I wrote a post about why we chose to stop working with CJ.
What is the environment at PetFlow like? What are your employees passions and what makes them get up in the morning and go to work?
The environment here is exactly the same as the one we had at AzoogleAds when we started. It’s very relaxed. Everyone knows what they need to do every day and gets their job done. There are no set hours, but everyone is expected to perform to the best of their abilities. Our door is always open to suggestions and we try very hard to keep both our customers and our employees happy. As a budding ecommerce company that interacts with tens of thousands of customers on a monthly basis, we really can’t afford to mess up.
What is your dream car and why?
Audi r8. I own it, and it’s f’n awesome.
I don’t have a positive view of Alex. Look at what happened with AzoogleAds and ringtones. AzoogleAds failed. Look at Petflow – it also failed – Phillips Pet Supply bought it. He tries to pretend he’s a successful serial entrepreneur but his ventures don’t pan out. The funniest thing I’ve seen is when tech crunch ran an “ad” (farticle) about Petflow’s launch. The farticle said Petflow received $5 million in startup loans from westwood ventures. Well it turns out westwood ventures is owned by Alex. So, in other words the business owner put his capital towards starting his business – and that is news? No business can start without capital and in almost 99.9% of cases it’s the owner’s capital. Duh! Shady!